"It’s time for local governments to place firm limits on the growth of new spending, keeping budgets within the bounds of economic growth and what taxpayers can reasonably afford."
This article was originally published in September of 2021
The growth of property taxes is no doubt a huge concern to many across the state, with good reason. As the main revenue source for local governments, property taxes serve as a painful representation of the ever-expanding footprint of government in our communities.
As local governments around Montana finalize budgets this year we’ve heard the usual blame game about rising property taxes burdening homeowners. Missoula officials have perhaps made the most noise, blaming property tax increases on the state reappraisal process, legislative limits on sales taxes, inflation and the rising costs of maintaining services.
If local governments want someone to blame for high property taxes, it’s time they looked in the mirror at their addiction to reckless spending.
How much spending is reckless spending? Many economists consider the rate of economic growth, as measured by population growth plus inflation, to be a fair measure of fiscal responsibility. When government spending grows faster than the economy, taxpayers suffer as the burden for funding services outpaces the economic benefits of new people and higher wages. For this reason, Montana legislative leaders successfully aimed to keep the pace of spending growth for the state’s 2023 biennium budget below the rate of population growth plus inflation.
On the other hand, local government budgets overall have skyrocketed past this fiscally responsible benchmark for years. Missoula’s city and county governments, for example, have left taxpayers on the hook for hundreds of millions in excessive spending over the last 15 years.
Since 2007, the city of Missoula’s budget has grown from $71 million to more than $230 million, nearly 130% faster than population growth plus inflation over the same period. Missoula County’s spending habits haven’t been much better, growing 64% faster than economic growth since 2007.
Had Missoula’s governments both passed responsible budgets for the last 15 years, limiting spending growth to no more than the rate of population growth plus inflation, combined they would have spared taxpayers nearly $200 million in 2021.
Officials might say all this spending is needed to keep up with the growing cost of essential services, roads, maintenance, etc. But here’s just some of the new spending requests for Missoula County that made the cut for FY 2022:
• $3,816 to send the county’s equity coordinator to graduate school
• $12,890 to hire university students to assist with diversity and equity initiatives
• $10,000 for a “democracy fellow” to help with election outreach
• $95,000 for consultants to support Missoula’s goal of 100% clean energy
• $24,000 to fund an economic analysis around passenger rail
Missoula’s government is certainly not alone in its spending addiction. As a result of reckless spending, local government property tax collections have been rising faster than almost any other level of government in Montana for 20 years. Recent reports say local governments statewide spent over $330,000 alone just on lobbyists for the 2021 legislative session.
Officials can equivocate about whether spending is paid for by fees rather than property taxes, but there is no such thing as a free lunch in government. No matter how governments may be restrained in collecting taxes, unchecked spending growth eventually must be paid for by the taxpayer — whether in the form of higher property taxes, assessments, fees or something else.
It’s time for local governments to place firm limits on the growth of new spending, keeping budgets within the bounds of economic growth and what taxpayers can reasonably afford. If the 2021 Montana legislature can start holding the line on new spending, why can’t local governments?
This article was originally published in Lee Newspapers
